Summary of Issues
On 20 October 2021, Lady Wolffe issued her decision following a debate in this case, concerning alleged historic abuse at Fort Augustus Boarding School (“the School”) run by the Benedictine Community.
The pursuer seeks £5,000,000 for alleged sexual and physical abuse whilst resident at the school between 1975 and 1977. Two of his alleged abusers are deceased. The surviving alleged abuser is also involved in the proceedings. The school closed nearly 30 years ago.
The pursuer has raised his proceedings against two former trustees of a trust which his representatives aim to prove ought to meet the claim. The defenders’ position is that the trust cannot respond to the claim as it was wound up around a decade ago and the trustees discharged.
At a debate heard on 24 June and 15 July 2021 the defenders argued that:
The defenders sought dismissal of the case on these bases.
The debate involved complex issues covering: trust patrimony, insurance, vicarious liability and limitation. The decision can be accessed here
The issues argued at the debate can be summarised as follows:
As regards the trust and whether it is a legally viable vehicle to meet the claim, the pursuer’s case relies on the “dual patrimony” theory. They argue that the trust estate has subsisted through time regardless of the change of trustees over the decades since the alleged events complained of. The last known trustees have been sued. It was argued that as long as there is an extant asset of the trust, the trust has not been fully found up, and can, therefore, respond to the claim.
The defenders do not dispute “dual patrimony” as a theory, but contended that there is not one single subsisting trust patrimony. Their position is that there have been multiple patrimonies subsisting only so long as each particular trustee held their office in respect of the trust. Any liability owed by the serving trustees (at their time in office) was private to them. The defenders also argue that the pursuer’s reliance on the trust estate or trust patrimony as a continuing entity involves an impermissible reification of the trust, which in Scots law has no separate legal personality.
Lady Wolffe decided at debate that she preferred the pursuer’s analysis that a trust patrimony subsists even though for a time it is not vested in a trustee. The pursuer’s target in this case is not actually the trust, rather an asset of it, in the form of the contingent right of indemnification under the public liability insurance policy, which he says was in place at the time of the alleged abuse. Lady Wolffe rejected the contention that there are multiple trust patrimonies which only subsist as long as a particular trustee holds their office. In her Ladyship’s opinion, where an estate has not been the subject of a final distribution, it is competent for a third party creditor to bring a claim against the trust with a view to it being satisfied from the available estate.
The pursuer contends that the trust has not been subject to a final distribution. He argues that an insurance policy existed at the time of the abuse, which is capable of responding in the form of an indemnity in respect of the trustees. In coming to her decision on the trust issue, and how it ought to be ultimately determined, her Ladyship considered the case of Forbes v Maclean ( CSOH 88), which involved similar difficulties to the present case. In Forbes, Lord Clark held that a number of matters that were uncertain (the question of how, when and in respect of whom any insurance claim might become an asset of an estate), required evidence to be heard before final determination. Lady Wolffe decided that there were parallels with this case with uncertainties which also require evidence to be heard – in particular whether the trustees have been discharged and whether the trust has, as a matter of fact, been subject to a final distribution.
The pursuer does not seek to hold the defenders personally liable, but rather establish liability in their capacity as trustees of the trust. He aims to constitute a claim against them with a view to accessing what he says is the (historic) insurer’s obligation to indemnify the trustees. The availability of insurance is not generally a threshold or legal requirement for a competent or relevant personal injury action. However, the absence of cover as between the insurer and the trustees, is not a valid reason to bar a claim by a third party against the trustee, if that claim is otherwise well-founded. Lady Wolffe determined that the availability or scope of any insurance cannot be determined without hearing evidence.
On the basis that the court accepts that the last known trustees are the correct defenders, and it is established following a hearing of evidence that a relevant insurance policy existed and remains an asset of the subsisting trust – the pursuer says his claim sounds in damages. In terms of proving liability, the pursuer offers to prove that the serving trustees (in office at the material time the alleged abuse took place) were vicariously liable for the acts and omissions of his alleged abusers. He relies on various high-profile recently reported Supreme Court decisions on the expansion of the doctrine of vicarious liability in support of his position on this front.
The defenders sought to have the case thrown out on the basis that the pursuer had failed to aver a sufficiently “close connection” between the serving trustees and the alleged abusers to lead to a finding of vicarious liability. However, on analysing the pleadings on this point Lady Wolffe noted that averments had been made to the effect that the serving trustees had appointed the headmaster and lay teachers to positions at the school. On that basis her Ladyship was satisfied that there were relevant and sufficiently specific averments to instruct a case that, in taking those steps, the serving trustees had “conferred authority” on those individuals, such that they might be held vicariously liable for their actions. Evidence would be required to determine the issue.
The defenders sought to have the case dismissed at the debate. They relied upon section 17D(2) and (3) of the 1973 Act to argue that this is a case where (i) a fair trial would not be possible; and (ii) the defenders would face substantial prejudice if the case were allowed to proceed further. In particular, they drew upon the reasoning outlined by Lady Carmichael in B v Sailors’ Society ( CSOH 62) (discussed in detail here) in support of that position.
Lady Wolffe, however, preferred the pursuer’s submissions on limitation. Her Ladyship was not persuaded that the court could conclude on the basis of legal submissions alone that the case ought to be struck out. Reliance was placed on the recent decisions in the Sailors’ Society case, as well as the English cases of JXJ ( EWHC 1914 QB) and BXB ( EWCA Civ 356) dealing with similar applications. Her Ladyship determined that this case ought to be no different and that these matters required evidence prior to determination.
Ultimately, Lady Wolffe determined that the defenders’ application to dismiss the case on relevancy grounds failed but that issues of both fact and law remained to be determined. Accordingly, her Ladyship indicated that procedurally the case ought to be continued to an evidential hearing in order to decide those issues. Whether that evidence was to be heard at a preliminary proof or proof at large was held over to a procedural hearing on 7 January 2020. Having heard submissions the court has now fixed a four-day preliminary proof in May 2022 restricted to:
Lady Wolffe was clear that, given the complex and numerous issues at play, this was not a case which could be determined at the debate stage. On all four central issues in dispute, Her Ladyship was unable to form any concluded view on the merits of the case without hearing evidence.
As discussed above, this is not the first abuse case to proceed to preliminary proof and it is anticipated that this may be a trend in this area where fundamental points are taken in defence at an early stage. Although the defenders were unsuccessful in having the case dismissed at debate, this case can be viewed in a positive light for insurers. The courts in Scotland are showing a willingness to (where appropriate) deal with technical legal points at an early stage, and fix limited evidential hearings to deal with those issues. In turn this may lead to cases being determined at a relatively early stage of proceedings, with limited evidence, as opposed to being decided following several days/weeks of evidence at a proof at large.
There are a number of novel issues raised by this case in an area of law where there is little precedent to look to for guidance. The issues are likely to be ones which will feature in future abuse claims involving trusts and historic insurance. Determination of this case is keenly awaited and we shall provide an update on the outcome of the preliminary proof once it has been heard in May.
If you have any queries about any of the issues arising from this case or historical abuse cases in general, please contact either Calum Fife, Partner, or Chris Rae, solicitor.
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